Apple shares continue to get slammed on commission/bonus related ‘actionable research’

“This morning Credit Suisse issued a report that said that their ‘channel checks’ showed that Apple cut ‘component orders’ by 10% recently. Reports such as these were put out by Citi and Pacific Crest before Apple reported earnings as well,” Jay Somaney writes for Forbes. “I strongly recommend a look-see at the above links if you really want to get an idea of the fun and games Wall Street research is all about.”

“Strangely enough, Apple is so easily hammered lower even by the slightest piece of negative news. Pathetic I know but that’s how things have been with Apple coming up on a year now,” Somaney writes. “The analyst at Credit Suisse says, ‘In our view, the continued weak supply chain news could weigh on Apple shares for the next few weeks/quarters.’ Then he maintains his Outperform rating with a $140 price target.”

“Like I have explained in the past this is a commission generating note issued by the analyst so as to provide the brokers at Credit Suisse a reason to call their clients to sell/add/buy shares of Apple as the case may be,” Somaney writes. “It’s called an ‘actionable’ research report in the business. Don’t forget it’s year end bonus time on Wall Street now and the heads of research and the heads of retail and institutional sales (heads of the broker force) are pushing their analysts hard to make these ‘actionable’ calls.”

Read more in the full article here.

MacDailyNews Take: As we’ve written many times, as recently as July:

The stock market is a game. You either understand the “rules” and play it well, and get paid, or it’s better to sit on the sidelines and watch it for entertainment.

As we wrote this morning, those who are interested in actually analyzing companies vs. fomenting low-information investor sentiment against them, are those who listen to what Apple’s management tells them:

Even if a particular data point were factual it would be impossible to accurately interpret the data point as to what it meant for our overall business because the supply chain is very complex and we obviously have multiple sources for things, yields might vary, supply performance can vary. The beginning inventory positions can vary, I mean there is just an inordinate long list of things that would make any single data point not a great proxy for what’s going on. Apple CEO Tim Cook, January 23, 2013

SEE ALSO:
Apple lower after Credit Suisse notes substantial supply-chain cuts – November 10, 2015

18 Comments

  1. Stocks go up and down all the time. Analyst write stories all the time pretending they know why stocks to that.
    The real reason is . . . well, a million individual reasons why someone would buy or sell.

    1. There are 2 sides to this.
      Sure it is cheaper for Apple to buyback shares at a lower price. After spending $140BB for a 20% reduction in outstanding shares, that means that shares are only 20% scarcer. So a small pop in the share price but a big saving in the cost of dividends.
      The other side of the coin is that options are less profitable for Apple employees. That could be a significant factor in retaining talented workers.

  2. Like if Apple would keep selling as much iPhone after Christmas.

    Same pattern last year, the year before and two years before.

    Why downgrade AAPL now? Credit Suisse sees something we don’t? I see the same thing as them, the Apple Watch. Be afraid… Market will speak up… Time will tell… Time… Get it?

      1. Wow, you are actually right. This is even worst. Losing 3% on a news without analyzing it. Because hey! That is what they seem to do on every news there is… Analyse it in order to find something to lower it… When in fact, this is business as usual for that time of the year…

  3. If Apple’s stock price went down because of one analyst’s call, why are Apple shareholders so stupid or frightened? People on this site are always talking about how undervalued Apple is and how great the fundamentals are, so why are there so many people in a hurry to dump Apple stock on some unsubstantiated rumor? Tim Cook just recently gave guidance for next quarter but Wall Street considers him an idiot or a liar. Where are all the negative rumors for Amazon, Google and Microsoft? No one is dumping those stocks. Companies with muscular P/Es unlike Apple with a weakling P/E of 12.5 or so.

    I know one day doesn’t mean very much but this sort of BS keeps happening over and over. Apple must be doing something wrong where Wall Street can keep pulling the same stunt to get shareholders to dump their stock. Last quarter they were also saying iPhones had weak demand in China and it didn’t hold true. Apple must have some of the biggest knucklehead shareholders around to be fooled so easily and often. If Apple is still buying back stock, all well and good, but I hope Apple spends future money on services or acquisitions because these buybacks sure don’t appear to be helping the share price one tiny bit.

    I may be griping but I need to speak my piece because very little of the stock market makes any sense to me.

    1. Steve didn’t give Wall Street the time of day when he ran Apple.
      Someone with power at Wall Street has made it their purpose in life to get back at Apple for that so they will be forever hammered.
      Makes no sense to you and I but some doped up millionaire feels he needs to punish Apple into oblivion, even if it is the best tech company in the world. The egos that these guys have are ridiculous. This is my opinion but it seems to fit.

      1. Tottally agree- It’s go to be someone with huge AAPL holdings ( ie: hedge funds or like you say some dopey billionare like Ichan) that’s ‘trickle selling’ to create a sell panic.

  4. On my local 12:00 news today the reporter said that AAPL stock was being slammed because the new iPhones are not selling. This failing Apple story was probably parroted throughout the Country today. It is also the tenth or so time in the last few years that an analyst has spread this type of misinformation, but, to my knowledge, this is the first time local news has covered the story.

    I’m happy that Apple management has made themselves more accessible to their fans and admirers over the last few months, but their rapid response FUD-buster team still needs some work. This type of BS is now reaching mainstream, which could impact sales in this gift buying season.

  5. …this is a commission generating note issued by the analyst so as to provide the brokers at Credit Suisse a reason to call their clients to sell/add/buy shares of Apple as the case may be.

    IOW: A pile of useless crap. 🐂💩 And anyone cares because why? Because of the usual paranoia that accompanies coke addiction on the part of certain Wallnut Street types? That’s my guess. 😛

  6. There are three stock stories: “Stock Goes Up!”; “Stock Goes Down,”; and “Stock Stays The Same!” Every analyst has to write something every day to keep his/her job. And so on and so on and so on!

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.